tourism, industry and military strength

by Phyllis K. Pooley

Pensacola is known as the City of Five Flags, Florida’s “First Place” City, and the “Cradle of Naval Aviation.”

The Pensacola metropolitan statistical area (MSA) includes Escambia and Santa Rosa Counties and contains the cities of Pensacola, Milton and Gulf Breeze, and the towns of Century and Jay.

Miles of unspoiled white sand beaches, blue-green water, state and national parks, an historical district with some of the nations oldest buildings, a National Museum of Naval Aviation, and other attractions, makes Pensacola a great place to live, work and visit.

INDUSTRY AND EMPLOYMENT

The graph on right compares employment by industry sector for the Pensacola MSA and Florida. It reflects the importance of the military, service industry and construction in the local economy. Within the broader category of the service industry, education, healthcare and tourism related services play the largest roles.

According to the Agency for Workforce Innovation, average annual wages in the area in 2005 ranged from a low of $13,484 in accommodation and food services to a high of $59,460 in management of companies and enterprises (essentially companies that own other companies).

The 2005 average annual wage for all industries in the area was $32,050. According to Minnesota IMPLAN Group’s input-output modeling software and using 2004 data, total annual industry output for the MSA is $19.1 billion. This is broken out into seventeen categories. Major employers in the area represent these industries across the board, with the military having the largest share. The unemployment rate, the percentage of the civilian labor force actively seeking employment that is currently unemployed, has generally been lower in Pensacola than in Florida and the nation.

As evidenced by the graph below, Pensacola outperformed both the state and the nation in terms of its percentage of the labor force finding employment until the area was struck by Hurricane Ivan.

The MSA suffered significant damage from Hurricane Ivan in September 2004, which led to higher unemployment rates in the following months due to loss of jobs caused from the aftermath of Ivan.

By May of 2005 the area had recovered and unemployment continues to be low, equaling or bettering that of the state and still significantly lower than the U.S.

U.S. MILITARY

The Pensacola economy remains highly dependent upon the military and defense industry spending. Pensacola Naval Air Station, Eglin Air Force Base, Naval Technical Training Center (NTTC) Corry Station Naval, and Air Station Whiting Field epitomize the presence of the military industry. Military activity in the Pensacola area has long been a major source of employment for local residents, of sales for local companies, and of tax revenues for local government. The military is now generating about $1,369 million in total industry output (value of an industry’s total production) per year in the Pensacola area and is responsible for employing over 13,000 persons. Military personnel earn approximately $1,240 million in payroll in an annual calendar year.

TOURISM INDUSTRY

The Pensacola area has a vibrant tourism industry that has long been an important engine for growth and economic development to the Pensacola economy. The area’s beautiful beaches, natural beauty, climate, and area attractions are some of the most important attributes that visitors to the area say influence their decision to visit. Tourism is responsible for $876.6 million in total industry output per year, employing over 19,000 persons who earn approximately $288.5 million in wages, and produces $425.2 million in total value added activity to the area. Value-added includes the sum of employee compensation, proprietary income, other property type income, and indirect business taxes.

CONSTRUCTION INDUSTRY

The construction industry is experiencing tremendous growth and demand in the Pensacola area. Pensacola residents and area investors have been buying homes as fast as builders can build them. The construction industry is being fueled by population growth, infrastructure needs and visitor activity. According to Woods and Poole Economics, from 1995 to 2004, the construction industry experienced an average annual growth rate of 2 percent while the average annual growth rate of the area was 1.3 percent. The construction industry is responsible for $1,673 million in total industry output per year, employing more than 17,000 persons who earn a total of $526.8 million in wages, and produces $727 million in total value added activity.

FINANCE AND INSURANCE

A large part of the finance and insurance industry is comprised of banks. There are 19 banks within the Pensacola MSA. The Pensacola banking group had a total of 114 offices and $5.4 million in deposits ending June 30, 2006. From 1996 to 2006, total deposits for the MSAgrew 86 percent, up from just 2.9 million in 1996. There are also 12 credit unions who reported over $1,412.8 million in assets in December 2005. The finance and insurance industry is responsible for $881.4 million in total industry output per year, employing over 5,800 people who earn a total of $231.8 million in wages, and produces $537.4 million in total value added activity.

REAL ESTATE INDUSTRY

The real estate industry is being fueled by the area’s population growth, outside investment and low interest rates. As population rises and the construction industry continues its current output level, the real estate industry will continue to experience increased demand and play an integral part in the vitality of the area. The real estate industry is responsible for $349.2 million in total industry output per year, employing over 2,000 persons who earn a total of $59.2 million in wages, and produces $244.6 million in total value added activity.

HEALTHCARE INDUSTRY

The healthcare industry is becoming an increasingly important component to the economic viability of the Pensacola area. The industry is comprised of hospitals, offices of physicians and dentists, outpatient centers, medical labs and home health care, and nursing and residential care facilities. There are six hospitals in the MSA; Baptist Hospital, Gulf Breeze Hospital, Jay Hospital, Sacred Heart Hospital, Santa Rosa Medical Center, and West Florida Hospital. The healthcare industry is responsible for $1,766.2 million in total industry output per year, employing over 20,000 persons who earn a total of $891.7 million in wages, and produces $1057.1 million in total value added activity.